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Leadership Development: What’s It Worth?

I’ll be travelling to Chicago next week to meet with a prospective insurance industry client. I’m joining Lisa, a sales director who has been talking with the potential client about our training programs and consulting services. The head of the company’s talent development function is interested in creating a centralized approach to leadership development that will impact the organization’s culture. She believes that a greater emphasis on coaching and involvement will make the company more competitive and provide a more compelling experience for employees. She’s especially concerned about losing young, bright, high-potential leaders who become frustrated watching the erosion of the company’s market share while senior leaders continue to defend the status quo.

Lisa briefed me on her conversation with the client so that we could plan our meeting. At one point in the conversation, she explained that the client, who is new to the organizational development field and to the insurance company, feels that the current human resources and talent development departments haven’t learned how to make a business case for their initiatives. According the client, the HR and learning functions have a reputation for explaining to senior leaders how programs would work and the learning objectives that would be met by the participants, but they would never clarify how achieving the learning objectives would translate into a business metric that the CFO cares about. Lisa warned me that we would have to come to the meeting armed with case studies and clear metrics that demonstrate the positive business results our programs have made for other companies. At this point in the conversation, I felt a familiar disdain rising within me. “Maybe you should get a different consultant to join you for this meeting,” I suggested in a mostly, but not entirely, kidding way.

I don’t know of a single world-class talent development department that built their strategy on the answer to the question, “What would make the CFO happy?” People in organizations deserve competent leaders. When leaders have an opportunity to sharpen their skills, dialogue about their challenges with colleagues, imagine possibilities and explore how their attitudes and habits influence how work gets accomplished, people learn and organizational capability increases. Frankly, that’s good enough for me, which probably explains why I’m a consultant and not a member of a management team.

Of course, it’s perfectly reasonable for a CFO or any other officer of a company to engage in cost-benefit thinking whenever someone approaches with a proposal for how the company should spend it's money. The top management team of any business has an obligation to use the company’s resources wisely. When I’m at my most mature, I recognize that my reflexive repulsion when someone asks me to quantify the benefits of leadership development is a kink in my personality rather than evidence that I’m more highly evolved.

In the end, if an ethical argument for investing in the development of your leaders isn’t getting you anywhere, you can always fall back to Peter Drucker’s snappy one-liner on the subject: If you think training is expensive, try ignorance.

Comments and Discussions

I am glad you realize that revulsion to quantifying the benefits of training is your issue, not that of the senior managers of the business. What else should they ask, because they will be asked the same by their management right up to the board level? Talent development departments don't run the business or have responsiblity for financial and market share results.

Perhaps you could find case studies within the industry itself that address the sticky "results" question? Another approach is compliance because regulated businesses like banks and insurance companies sometimes have to document their efforts at cultivating a climate of ethical leadership. Expect more of that.

I know at the City where I now work managing a large federal grant project aimed at computer literacy), the City has taken responsibility to provide basic training competency in supervision, coaching and disciplinary techniques. Part of this is just self-defense against managers whose uninformed actions might trigger an employee lawsuit.

So here is another approach for you: training is "insurance" against lawsuits filed by employees when supervisors go over the line in their coaching or disciplinary actions. I realize that we idealistic people do not like to use fear as a motivator (too far down on Maslow's pyramid), but it is in some cases.

But when you are talking "leadership" as at the top level, that is more about philosophy, isn't it? Self-knowledge, worldview, systems thinking... Not too many business people out there are into this and probably won't be soon.